Kook's Weekly - August 4

[00:00:00] Speaker A: Okay. Good evening, everyone. Thanks for joining. Let's get to it. So a lot of thinking has been done in the past couple days by myself, but really guided by everyone else. Um, and it's always interesting to be in the space mob because at some level it's also a journey into an insane asylum full of complete wackos who help you with your due diligence, but also can dramatically make you overthink things. And so thanks for help keeping me modestly insane, everyone. But on that note, it's really good because it helps you really push your thinking. And so some stuff Mpanman talked about last night, because as always, he likes to just shamelessly plagiarize all my intellectual property. But just kidding. But we did talk about this. Yeah. On Friday, first of all, I was trying to get up to speed on Charlie Ergen, and we'll get to that in a second. But there's a lot of interesting stuff that occurs in the public markets in terms of the invisible hand and how the market doesn't ever tell you what it's discounting, but the collective action of people who are full of greed and fear ultimately can drive some pretty interesting effects for a stock. And interestingly, we had a big tsunami last week. Luckily it didn't seem to hit the US. And it's interesting because we're, when I say we, a lot of us who are really OG NPA investors are so thoroughly brutalized by our experience that the muscle memory can be instant, severe, but unfortunately calls upon a lot of the wrong Experiences. And one thing I've noticed in my career is when a stock starts to go up despite what's perceived as bad news, it's an interesting phenomenon. And so I've never really been a short seller, or have not been a short seller. I've shorted some bonds, but that's kind of the limit of my risk tolerance. But my firms have. And so we've had guys that are responsible for being the short sellers and it's a miserable life, but They would usually lock into some thesis, and it's so hard to adjust when all of a sudden your thesis is quote unquote right, but the stock keeps going higher, and you have to ask yourself what's going on. If you're good at being a short seller, which I don't think very many people are, you need to really know when to run away and cut bait. But it is interesting now where you look at ASTS and the stock is so strong, Amid, let's look at the negatives. We just issued a convert, so we had dilution. Oh my God. And then we have a delay of FM1, but no real PR from the company. Oh my God. Well, I'm sure there's other stuff that's negative. Charlie Ergen is creating the quote, first ever wideband D2C constellation. Oh my God. I thought, I thought we were first, but Charlie said he was, so we, we must not be. Yeah. And then he says we're not even competing with them. So a lot of, in theory, negative news. Yet here we are above 50. Let's just even say above 20. I don't know what to say. The stock's up. And so what's interesting is then juxtaposing that against the SpaceMuck sentiment indicator, which is everyone. I'm kind of a joke of a sentiment indicator. So I view myself as A caricature of a real person. And so when I am kind of doing this kook sentiment indicator, it's not a lie. I mean, I just think I'm a tragically flawed person, but I'm aware of it. And so when I feel myself just being like, I want to walk into the ocean with my clothes on and it's all over because the stock is like down a dollar, that's an authentic feeling I'm having. You know, my feelings are real. They're ridiculous, but they're real. And it is true that I will go out, you know, I live in a nice place and I'll go out and surf and I just am like, I don't know, I'm just going to roll over and let a dolphin eat me. Because again, like AST issued a convertible bond. It, as it turns out, my sentiment is a manifestation of the market, the worst of the market actually. So it's not that it's like, oh, Kook is like a great indicator because he's a genius. The opposite. My true natural sentiment are truly the worst of what humanity is capable of, which is why I try to publicize it so you guys can all trade against it. But what's even worse is the general space mob DD machine where people— there was some article from some radar Indian dude saying that FOMO is going to launch whenever, the year 2040, and people go crazy. My DMs are lit up. Everyone's panicking on these other channels we have to discuss diligence. Everyone's like not sleeping, and it's I mean whatever. I'm right there with them. It's all like oh my god! Let's not let's like blow our weekend looking for any hint that FM one's going to ship you know tomorrow. But it is it is a good thing. I saw the zoom out hashtag trending over the weekend and. It is really important to zoom out and just also realize that Space Mob has tripped itself up so many times before, really through good intent. And certainly Space Mob is way better at emotional control than I am. So I'm not trying to be the pot calling the kettle black. Let's, let's be real here. But you do have to take a step back and read the disclosure. And this is my recurring theme is just read the disclosure. And then if you don't like to read, which I can appreciate. Just look at what the Verizon CEO is saying. Look at AT&T blasting memes about us. Look at FirstNet saying, oh my God, it's happening faster than expected. We must go faster. These are the things that ultimately matter, not the day-to-day. The stock market is always going to be looking ahead, usually not 12 months, especially when you get to the end of the year because people aren't going to look past December, But it's going to try to be looking 3 to 6 months ahead, even if we're all looking one day ahead, which I certainly am as well. And so that's what's happening with the stock in my view. People are seeing the inevitability of it all because when you read the disclosure, they very clearly have somewhere between 20 to 40 to 60 satellites at some phase of production. They have the cash. They really aren't reliant on the kindness of others now. Yeah, sure. They are reliant on Brendan Carr saying yes. Brendan Carr will say yes. Sure. They are reliant on the MNO partners, uh, continuing to honor the spectrum agreements and for Verizon to in fact have a spectrum agreement. I'm very confident in that. But most of the things that are required for ASTS to be a name your price stock are now generally within their control. And that is not what was true a year ago. And that is why I think the stock is very robust because people unlike us, you know, a lot of people here are trading options and I could in theory sell all my stock in a day. I'm not going to, but if you're a really, you know, if you're Fidelity and you're owning 10% of the company, you have to think longer term and really position of, is there a secular trend I like? Yeah, it's pretty obvious. Is this going to be a winner? Yeah, it's pretty obvious. Do they have the power to deliver? Yeah, seems pretty obvious. And are there a bunch of events that's going to really drive realization of all this in the next 6 to 12 months? Well, yeah, pretty obvious. That's what's really happening. And that's why it's really important to recognize that when we all, and I'm not trying to blame others, I am the biggest culprit of all of this. So I'm not, let's just make sure we're all pointing the finger at me if we want. But when we're all going crazy, we create our own wall of worry that we generally then climb right back out of. And so it is useful to know, you know, just because I see so many people kind of DMing everyone and get kind of worked up about nothing. It's very useful to understand that that itself is creating a cap on the stock price that then upon the next dose of certainty, we rip really higher. And Well, I'll never tell anyone to buy the stock. I never have, I don't think. Obviously my memes are kind of silly and everyone knows I own it, but I don't think I've ever told anyone to buy the stock and I never will. But what I really hate to see is people who otherwise made that decision and then get tripped up because of Twitter or just well-intended DD and then actually kind of screw themselves. That's the ultimate thing that I know a lot of us really want to help people avoid. And then let's just look at what happens in August. I had this sneaking suspicion that August is generally good for us. It just so happens that that's when satellites tend to be ready. And so if we just look at the seasonal year, and again, it's not a great seasonal analysis because we've actually had real events in the past, but guess what we have this year? Real events. August has been the time to own this stock. And so last year we were up 40% in August after a ripper of a July as well. And then 2023, which I actually have no recollection of 2023 anymore, it was down 9%, but in 2022 it was up 71%, 2021 up 15%, and 2020 it was basically flat. And so it's a good seasonal. Now don't ask me about September. We'll talk about that later. I'll just say it's less good. But when you look at it, the seasonal for this stock, generally May is really good. just because last year we were up 300%, so that will do it. But really, when you look at it, August is a really good time for this stock. And we are now in August. And so what else is happening in August? On August 11th, we're gonna get the update from the company. And so they, they're reporting earnings. Now, I haven't prepared, I have, I, well, I have not prepared earnings preview, but that's never stopped me from talking. And so, you know, I know everyone here knows that I don't do any prep, so let me just ad hoc it like I always do. So what are they going to talk about? They're going to tell us about FM1, and I think they're going to surprise us on FM2. And so people are going to wake up and either we've shipped FM1 or it's, you know, wrapped with a bow on it. But then I think there's a sneak attack, and I think FM2 might be going. And I have some theories about FM2 that it might be going on Blue Origin, but we'll see. But it's going somewhere and that somewhere is space and it's going up there soon. But then I think the real surprise is just gonna be how fast they're advancing the other Block 2 satellites. They've kept repeating the guidance that we're gonna have at least 20 by year end. And at that point, the true inevitability of this company will have happened. And that's where I think the real revaluation of this stock occurs. And we'll get to that in a second if I remember. But then I think we might have some updates on Golden Dome because there's a Golden Dome conference on the 7th, which is, what is that? What day of the week? Um, I don't have my Outlook out. Oh yeah, I do. Hold on. That is, uh, oh, Thursday. And so there's a Golden Dome seminar on Thursday. We will find out. I don't really know what the right expectations are at this point on Golden Dome progress. I just know that I think we win it. And the company's gonna talk about its amazing balance sheet, but also we're gonna have potentially meaningful revenue for the first time. Block 1 has been up there for a bit. They'd given us back half revenue guidance, so I don't know what would stop us from having already had some revenue. But at the very least, you'd hope that they're gonna repeat the guidance and maybe it's downward guidance a little bit just 'cause the satellite launches maybe They, maybe the satellite launches are a little bit backended versus original expectations, but perhaps the revenue guidance has increased because we've won more government contracts and those government contracts are going better. So those are accelerating. So I don't think the downward revision of revenue guidance is actually bad for the stock 'cause I think people would be so surprised if they have real revenue at all. And so I think any revenue at all and a repeat of any guidance is gonna be a big deal. And I think there's a very real possibility that we increase guidance. And needless to say, they have a lot of things going on. You know, we all saw interesting flight patterns over Iran when that war was happening. We know that there's been military visits to the facility. There's a lot of things that we think we know. There's a lot of it's hearsay, and those might have culminated to some really exciting updates. At the very least, this company has is gonna be able to pound its chest on having $1.5 billion of cash, significant acceleration of production. You can see all the people they've hired and presumably a lot of government programs that are really moving their way. And what you don't know is when they're gonna announce the Verizon DA or any other large DAs. And those will come. Frankly, every day they haven't come is a blessing because it means the value only went up. There really is no need to ink those deals before you actually have a workable constellation in the air to light up. At that point, then you're losing money because you're not monetizing capacity. But up until then, you really want to have the M&Os see the whites of our eyes. Before we kind of shoot 'em with a contract. And that's going to be an important call because it's really the call that precedes the fusillade of satellites that will be going up in the months that follow. And so then Katzi had a really interesting tweet, which I really use as my thesis as to why there's inevitability here now. And the tsunami of ASTS is all but unstoppable, and also why the stock price has been this strong despite some delays and just realities of being a de novo aerospace company. And so, as Katzi says, the purpose of FM1 and FM2 are really to inaugurate the production of Block 2, to spread some launches around to get some other partners that we can utilize over time and to test the next form factor, which is this bigger array, which is easier to unfold, but also bigger and has this tail to it. And they want to go test these things and make sure that they make any adjustments needed before they blast off the next 20 to 50 satellites. And so we know that ASTS does an incredible amount of testing. So the expectation should be that these satellites all work really well. We know that they do furl and unfurl them many, many times on the ground. And so they really should work. We know that they've integrated their testing, the thermal testing, the vacuum testing, the vibration testing. I'm sure there's other testing that I'm not aware of, radiation testing. And so very rigorous, but you know, it's a new unit. Something might happen. They've had a 100% hit rate so far. Thank God. But at this point, They can really afford to have a setback, and I hope they don't have one, but they know that they can make this work. And the market now, I believe, sees that it will work because you know that the software works, you know that the phased array works, you know that the satellites are capable of generating power, and now they're just trying to up the ante by having an even bigger one. But they've proven that it works. And then the market now knows that if there is anything that gets in the way with a glitch, the company has the financial wherewithal and the fallback plan to get it done. And that's a big step from when this company was truly binary, because in the past, if you had a failed satellite, it was going to be years before you had a second shot on goal. And you didn't have the liquidity. And so if you had a failure state early, you not only didn't have the liquidity, but you would not have been able to raise it. And so it would've been game over. Now, if you have a bad satellite, well, we have 20 more basically ready to go. And so you're just gonna make some adjustments on those and you have all the money in the world. And so SpaceX blows stuff up all the time now, and that's okay because the market realizes they'll figure it out. They have enough track record at this point, just like we do, that people know the engineering team is good. It's not Astra, which launches rockets sideways. We've put up 6 of the most complex satellites— I don't want to say complex, the biggest satellites ever, and they all worked. And now we have the financial wherewithal where we don't actually have to ask people for money if we have a setback. That makes this stock fundamentally much safer because, well, Sure, you might have a mark-to-market. Who knows what happens to the stock price if you have an anomaly, but you can just hold it now. You're not going to have a fatal experience with it. And that totally changes the risk profile because the prisoner's dilemma is not such that if you have a problem, everyone is racing to the door to exit. Now, if you have a problem, people are going to be like, yeah, whatever, that sucks, but just hold it. And I have every confidence that This company has, again, they've batted really 1,000%. BW-1, BW-2 worked, BW-3 worked, despite that they redesigned the BW-3, which I think newer people might not appreciate. And then Block 1 worked, all 5 of them launched in one of the most complicated orbital insertions that SpaceX has apparently ever done. That worked. So It's a great company. They have a lot of credibility and these Block 2s are going to be a game changer. So that's really what I think is going on here, you know, is very frustrating for the shorts, but I think they probably fail to realize the change in what's happened here where one failure state is no longer terminal, but in fact, really inconsequential. If anyone has patience of like 3 months. And that makes for a really bad short because then behind that, and let's go look at what Redrum was saying, you have this tsunami of value that is going to hit. And this is the thing I really believe. Redrum does some really cool work that is very consumable, but he shows his path to a $1,500 stock price based on revenue of $24 billion. Now, I don't know, but you know that the TAM is very, very big here, and it's probably a lot bigger than we think. And we can argue about the multiple, but we know the commercial market is really big. We know the government market is really big. We know the military market is really big. You know, the margins are really good. And you know that it's a high moat business, so it should have a very high multiple. And that's the opportunity here. And so you have a qualitative opportunity, which is very easy to understand now that people can see what Starlink did and we should be better. And then you can quantify that. So someone looking at a $50 stock price and saying, hold on, this could be 20 to 30x from here. That makes people very patient for any short-term delays. When you can really see that the company is executing, it's just sort of getting the first shots fired from this launch campaign can get mucked up a little bit. But I think people really do understand that while the first Block 2 satellite might be a little complex to finish, once they finish it, it's going to be like a Gatling gun of satellites. That's what I think the market is very quickly understanding. And you want to be careful of being too cute right now. You know, the sentiment is pretty crappy. It's amazing how fast it flips. And we all, despite being long-term thinkers, I think in general with the space mob, it is very easy if I just think about my own emotion to get so myopic so fast and just how dangerous that is because all it takes is one portfolio manager from Fidelity or Capital Research to glom onto the bigger picture, and then they just literally go buy 10% of the company and that moves the stock price. And then if there's news, like think about a Verizon DA coming out, which could be earth-shaking, then the whole Muppet crowd of traders jump in and there's just not a lot of stock 'cause it's pretty well held. And that's the risk. We've seen that, how fast this all happens. And so now let's talk about just how great The company's balance sheet is. And I was kind of funny, I was doing this math in my head and then Anpanman put it on paper, just complete coincidence. Because I was doing the math, I went, oh my God, we have $4 per share of cash. I realized there's a convert and everything, but just thinking very simply, we have $4 per share of cash. We have more cash per share right now than the share price was nearly a year ago. I guess it was more like a year and a half ago now. Time flies. But it's really pretty crazy just how much we've improved the wherewithal of the company. And then we have Golden Dome, we have Legato, we have the SATCO JV. There's all sorts of things that have happened. But most importantly, and this is the point that Amped Man was making, is now a delay is a very interesting thing because If you have a delay of FM1, we've already kind of borne the brunt of that delay. Now we're at the final end of it. So to freak out about something that's already 3 months past due, where now your, your real forward delay is measured in maybe days or weeks toward visibility of the first launch, but then behind it, you, you have so many satellites that are ready. You have to be very, very sensitive to missing the forest for the trees, especially again, because the company has the wherewithal to control its own destiny. And then things that people might not fully dial in, when we move to the next tweet, which I titled Roth meeting FirstNet, the new NTIA director, Ariel Roth. I have been pointed in the direction by people who know that this is a big deal. And so then what do we have? Well, we have Ariel, In front of FirstNet vehicles, more importantly, FirstNet vehicles that are projecting mobile network coverage. And so I can only imagine she's talking about how ASTS is going to really improve this. And she is very pro-satellite. She's supporting the BEAD program, including satellites, and could be a very big advocate for us. But most importantly, or maybe not most importantly, but most near-term, I believe that she's the one that is going to pave the way for the Legato deal to get approvals because the NTIA is responsible for the spectrum coordination that will be necessary if it hasn't already happened with the DOD. And I haven't found anyone that's been able to confirm that that has already happened, although in my view, it really should have because to get a bankruptcy confirmed, it must meet a legal requirement called a feasibility test. A plan is not feasible if the DOD is simply going to block it. That seems really straightforward to me. And given the number of professionals that were involved in this bankruptcy, given the fact that the DOD is the adversary proceeding star with Legato parties pursuing the taking lawsuit, it's not like this is a nuanced detail. So I think that they probably have already cleared the way. And it would also explain why ASTS had their picture taken with the NTAA crowd the other day, which goes to the Legato confirmation hearing is also this week, if I remember, on the 7th. So it's very exciting there to have that really moving forward because that will, I believe, in the future provide a really nice basis for a nice sum of the parts story that Wall Street will glom onto. And then we're all gonna think they're a bunch of losers for being so myopic, but I think they're gonna very quickly realize that base sum of the part of this thing is a very high number. And we're just gonna think that the actual enterprise operating value of this company is much higher yet still. But let's, you know, make sure we don't count our chickens before they hatch. So B. Riley is good at counting chickens apparently because they maintain their rating of AST SpaceMobile as a buy with a price target of $60. which is great. They moved it up from $44. But this just goes to what I have always told people about the sell side is don't knock them too much on the target price, except for Deutsche Bank. Those guys are ballers because they're like, whatever, $681. So they're cool. But other people are less cool and they're just going to move the target prices up with the stock price over time. So I wouldn't really worry about a target price from a sell-side firm. I'd really read their work for qualitative assessment, industry color and sort of strategic thinking about what's going on, and then look at their numbers, see how they calculated them, try to do your own on the same logic. And you're really asking yourself the question, do I think this company can do $5 billion, $10 billion, X billion dollars of revenue? That's what you're really— it might be what you should really be trying to figure out. Because that's how they're going to be valued. It's going to be a very very fast growth tech company or tech infrastructure company, and it's going to have a nice juicy multiple. And so if you can paint a picture of why this is going to get to $10 billion fast, then you can really quickly paint a picture of why this is worth $100 to $300 billion. And then you could divide by, you know, my view of a 400 million terminal share count and get to a target price. And that's That's as complicated as I think you need to make it. So then we also had a really neat article that, who found this? Kevin Chen found it, of course, Kevin Chen. And there's this LinkedIn article and it was written with a very high degree of technical expertise. It was not Cathie. I think Cathie would've just owned the analysis. So there's other people apparently like Cathie who are smart. And so what's interesting is this Article basically was about how ASTS seems impossible, but then they did the math and said it's not. And so they just went, look, the downlink success hinges on the satellite's ability to achieve an effective EIRP, which stands for like radiated energy, something like this, of 83 decibel watts per meter per beam. And so really basically just a lot of power. And the reason why those beams are so powerful is because the satellite is so big. And so you need a big satellite because each of these little antennae overlap and, and together the, the waves are on resonance or deliberately not on resonance. So they either amplify or cancel out to create these very powerful and directed beams. It's very interesting. And so just a nice refresher on the technical part of this. Which the technical part is obviously necessary for there to be a very efficient and attractive business model. So to my point that you could get run over by big long-only investors, we have the Ohio Public Employees Retirement System, OPERS, initiated a $3 million position in Q2, and some of their big positions are Nvidia, Microsoft, and Apple. So pretty good portfolio for them. But this is what's gonna happen is as ASTS starts to commercialize and show proof of revenue, these larger funds are going to see the secular story. They're gonna go, what is the backdrop here? What is the opportunity? Is this a leader? Yes, yes, yes. And then they will buy and they will hold because they have seen this game. This game is difficult to identify and have the clarity of thought. But once you have it, it becomes very simple in theory, because all you have to do is just hold it. And that's the hardest part is holding it. And so I've just been thinking all this weekend about how Steve Larison's portfolio, we never really knew what happened after he passed away, but to the extent they didn't liquidate his estate, his estate's going to outperform all of us just because he can't trade. And that's the hardest part with these is identifying a winner like Microsoft or Nvidia and then doing nothing. It's a very difficult active decision to do nothing. And the people like OPRS are not gonna be trading this stock. They're just trying to identify, will it work? Is it a big market? Are they gonna be winners? Are they financed? Yes, yes, yes. Buy. That's what they're gonna do. So then other things that are driving value, let me just take a sip of my Now lukewarm, disgusting coffee. The HALO bids are done. And so HALO is that SDA program. We are a prime contractor in that pool. And this is something that we really believe that FM-1 and FM-2 are a part of this. It just fits. The inclination of these satellites, The altitude of these satellites, then juxtaposed against the next 20, which are at 690 kilometers versus these at 520 kilometers, this sort of rushed and a little bit opaque way in which they've been done, because we suspect that they might have some additional payloads, although we really don't know. We really think that these satellites are the 2 satellites that the SDA actually put in the specs where you were supposed to do 2 test satellites. Yeah. they were going to evaluate. And then later in 2026 or 2027, you'd get a bunch more orders. It's a perfect match for ASTS's FCC filings that they put out. And these are very Byzantine filings. So these are not very easy for people to digest. We have Katzi. And so he digested them for us. And when you read those, it's just an improbable coincidence. When you read the SDA documents and then you read these FCC documents and put and one together, it's just improbable that, that they would not be part of the HALO program with these 2 satellites. And so it's— and anyone, you know, what makes it a little easier is they literally put out a press release saying we're part of the HALO program. So I guess, yeah, good job to me, right? I don't need to do all that work. I could just literally read the press release as usual. But it is neat to see these government programs really kind of accelerate But then around the world, we also just have exciting developments. And so Dr. Mike reminded us that last week, the Ofcom, which is the UK's FCC, is still working on having a framework for D2D by the end of 2025. And so they're scrambling to keep up with the pace at which we're going at because Vodafone is really pushing to light this up. And then the rest of the world is going to follow. And that's what the company had always told us is you really got to focus on the FCC because they're going to pave the way and then other countries will be fast followers. And so the bears that said, well, you guys are screwed, there's no, literally no rules to facilitate you in Europe, for example, what they failed to acknowledge is that we're dealing with a dynamic equation where politicians are actually trying To do the right thing. And then companies, when they see opportunities and when consumers see opportunities, will clamor. And the regulators serve the people. It's not a rigid system. And what we're seeing is the regulators dynamically adjust and accommodate and accommodate quickly. So it's nice. Not that I particularly care about the UK market, but More money, more problems. And we want all of these markets because we have a fixed cost asset that has capacity that is useless when it's flying over the UK if it's not being used in the UK. So we do want that market. So then we also have Blue Origin. Blue Origin is ramping up. They're getting to be a very important company. And we had Dave Limp, who is the CEO of Blue Origin, meet with Senator Ted Cruz. Where they're talking about, they're really just talking about screwing Elon Musk. Let's just be honest here. And so the US government is all too happy to have Jeff Bezos be very successful at the rocket launch business to try to hedge their bets. Ted Cruz was also at the AST facility, as you know. And so we think that we will be launching On New Glenn. I think we'll be launching a lot of satellites on New Glenn. So it is nice if New Glenn speeds up. They're going to have their own delays as they really ramp up capacity and things like that. But as they launch, I fully expect that we're going to be taking capacity when it's available to spread the load from launches that are otherwise being done on SpaceX and then other launch providers, you know, near-term ISRO and things like that. But New Glenn is really gearing up, and so David Limp has been tweeting out some updates where they're getting ready and they're showing their—I don't know what they're showing here—we're gearing up. What are they doing here? Activate some hydrogen peroxide system that is as powerful as an F-18 Super Hornet. Who knows? I think what he's trying to tell us is that they're getting ready for launch. The other people that just launched something probably should have done this earlier. is ISRO. And so ISRO had a successful launch of the NISAR spacecraft. So a very important mission for them, and they were successful. So the launch vehicle performed nominally, as they say, which really in layman's terms means it worked. And then the cargo worked too, which was really not on ISRO, but it is nice to see a mission go According to plan, and I have a lot of confidence that our mission will go according to plan. We also have Rakuten trying to launch this service earlier, and so what do they know? And that's what I go to when people are sort of freaking themselves out. We have Verizon talking about their deal with ASTS Space Mobile. We have AT&T going full on crazy on Twitter. We have Rakuten saying it's coming early. We have FirstNet coming early. They know more than we do. They are literally the definition of insiders. They know more than we do. They are getting updates more likely than not with higher fidelity level than we have. They are seeing something. They are not conditioning the market for disappointment. In fact, the opposite. They're conditioning the market for me being a rabid raccoon at a dump full of discarded hot dogs. Like, that's what they're doing to me. They're turning me into a rabid raccoon in a dumpster full of hot dogs. And so why are they doing that? To play with my heart? Quite possibly. But I think there's something else at play. And so on the FCC filing from July 25th, ASTS SpaceMobile anticipates launching up to 20 satellites, including FM1, And excluding Block 1 through the end of this year. The first 2 of these satellites, including FM1, will operate at an altitude of 520 kilometers, and the remaining 18 satellites will operate at an altitude of 690 kilometers. That is, that is in an FCC filing from last week. And then I went through, I think I tweeted this somewhere. Um, did I tweet this? Yeah. I could have sworn I did it. Well, anyway, I was going through, well, actually Kevin Chen was going through all the other disclosures. Let me see if I can find it. Oh yeah, here it is. Sorry, maybe I didn't tweet it. So it was interesting. Kevin Chen is an absolute animal, is what Kevin Chen is. And so he was going through, and then I copied it, the prospectuses. And so May 13th, 2025, let me take you back to the past. In the prospectus ASTS put out, they said, and I quote, we expect to ship the first next-gen Block 2 BV satellite to the launch provider during the 2nd quarter of 2025 for a launch scheduled in July. Well, that did not happen, as you well know. So then in the June 2025 prospectus, so before the fact that we didn't know that, they dropped the July Language, but they said we expect to commence our launch campaign shortly for over 60 satellites in 2025 and 2026 at a cadence of one launch approximately every one or two months on average. And then they say the timing is contingent on a lot of things. So they totally hedged their bet in June twenty twenty fifth. So what did they know? What changed? Well, then the ISRO delays changed. They all of a sudden realized that that. that launch ahead of them was out of their control. It started to slip and they pulled that language. I always remember that the— I kind of made the joke on Twitter, but the prospectus is the hand of 100 lawyers. Never forget that. And this is a really risk-averse company. They're not swashbuckling with making known false statements. Like they'll miss guidance, whatever, but this is a company that will not make a false statement. I can promise you that. They're very conservative in that respect. So then on July 28th, last week, we got new language in the prospectus. And quote, we expect to ship the first next-generation Block 2 satellite to the launch provider in August 2025 and commence our launch campaign shortly thereafter of over 60 satellites. So they reinserted that language. Now that's an active decision. All else equal, you would just carry forward the prospectus language from June. Why in the world would you update it? Unless there was something new or not new, but just with increased visibility. The dominant theory is to not overthink it and say that there was a lawyer who said, yes, you can put that back in there because you feel good about it. You would never put that back in there. As you're issuing $575 million of convertible bonds, if it were knowingly false, that's called fraud. And so they put it in there, and they didn't have to. And you might be like, "Well, Cook, why didn't they have to?" Well, as a former convert trader, these people are dumb as bricks. They literally just go, "What's the vol? Is it going bankrupt? What's the premium?" Da da da da da. Like when people. Think that these convert holders were doing due diligence? Give me a break. They got a call from a broker. It's very evident these bonds were cheap. They were, and they were all scrambling for allocations 'cause they know that they were going to make 3 points without even thinking. And so they were not reading the prospectus going, oh my God, they changed the language from June. Ooh. Most of these people can't read. You think I'm joking, but as a former convert trader, I can assure you that some of these guys literally cannot read. They just know how to trade the Greeks really well, and they know how to ask their prime broker if there's stock loan available. It's like, what's the cost to borrow? That's kind of the extent of it. And so they didn't have to put that language in there, but they did. So that's what makes me feeling really good because I know what I own and I did a little bit of due diligence. So the next tweet I had is This LinkedIn post. I don't know why I did this twice, but you know what? The work I do is free, so don't complain to me because this is all a free subscription to y'all. But it is the same article that Kevin Shen, I think, found. And it is really cool because it shows all the math, which I couldn't understand to save my life because I am part of the clueless cult. But it's all there. You could check it. And the conclusions are just like, oh cool, it works. So we knew that, but anyway, you can see it for yourself. I am excited about the Legato confirmation hearing because I am excited about Legato. And this Legato stuff is coming at a very interesting time to the EchoStar announcement. So I'm of the belief that you had a very interesting scenario where you had 2 sellers and 1 buyer. You had Legato with Spectrum. And you had EchoStar with spectrum and you had one buyer, which was AST SpaceMobile. And then you had one criminal called SpaceX who decided they don't want to pay for stuff. They just want to steal it, which is not a very effective way to come in possession of product when you go, my bid is zero, but why don't you turn your back so I can hit you in the head with a sock full of pennies and steal your spectrum? That's kind of Elon Musk's approach, which turns out to not really be effective to ingratiate yourself with Charlie Ergen. And so what I think happened here is ASTS is really the only one that has figured out how to turn lead into gold, alchemy as they call it. And they only need so much spectrum. And Legato's rational and Charlie Ergen is not. And so I think that's why we ended up with the Legato spectrum and not the EchoStar spectrum. But then EchoStar has a real problem. And so there was a really great Spaces that Anpanman did. I learned a lot from it and I almost, almost ashamed to say how much I learned on those things because I had literally just talked to Anpanman right before his Spaces and thought I had drained his brain of all of his knowledge. But he really understands EchoStar really well. So I had a really good time listening to that last night, learned a lot. And I knew some of the high-level stuff about Charlie Ergen, but Anpanman has like a next-level understanding of it because he was trading all this stuff back when he used to work. And interestingly had the experience with Tim Ferriss, so we know why he's just like a total clown in terms of knowing some useless facts, but not knowing how to put it all together. And so I was listening to the EchoStar earnings call yesterday and It is really just an exhibit of behavioral red flags. They really don't know what they're doing. And so if you listen to that earnings call, it's full of deflection, bullshit, fake promises, ambiguity, arrogance, and reactive sort of decision-making. I think it's a ploy. And so they need, just like they previously had a ploy with IoT, And things like that. This is their next ploy where they go, "Well, aha! We'll be able to use our spectrum as per our agreement by using DDD." But then you listen to them, and they're saying, "Well, we're going to do like wholesale deals with MNOs." Yeah, good luck. MNOs hate these people. They're they're you cannot do business with Charlie Ergen. And so they don't even know what their business model is. Like Boost Mobile's not doing well, and then they even say like we're not going to. We're not going to target our own customers because we know we can't. So then we're going to have this global wholesale market, but we don't have any partners for that either. And we're going to have it outsourced by MDA, but MDA hasn't done it either, to my knowledge. When I was researching that, they've made some stuff work in the lab. So that means that they're at like BW0 stage, not even BW1 stage. And what I think also happened, I have some friends that follow this pretty closely and so they track Charlie's jet. And so Charlie had just gone to Apple. He went to San Jose. And so they thought, well, maybe he has a deal with Apple. Well, they would've announced that, promise you that. If everyone in the world knows that Globalstar has a deal with Apple, even though I don't think that was formally announced at the time, I could be wrong, Charlie would've announced that. And so I suspect, this is just me thinking, I think Charlie did go to Apple as his last gambit, and I think they told him to go to hell. And so then he had to do this MDA contract, which I suspect is a paper constellation because he doesn't have any money. He doesn't have any customers. MDA, I don't know how they expect to do this. It took a highly motivated team that had the sword on the steering wheel and in terms of pressure. Took ASTS 7 to 10 years to do this and a billion dollars of R&D. To go outsource this to a prime contractor where they don't have that same fear of God, it's just not, it's just not going to work. And so the other inescapable observation is that just a couple of years ago, everyone said that ASTS was an impossibility. And now it's literally the go-to bluff of like, oh yeah, no, it's cool. We're just going to do DDD, no problem. And so what people used to think was impossible is now the, yeah, I'm just going to go run to Starbucks and grab a coffee. No problem. It just tells you how far we've come. And it really, I think, is just showing the ascendancy of ASTS that we're now the default placeholder when people want to bullshit the FCC, whereas the prior default placeholder was like IoT and stuff like this. We're now the placeholder. And so Echo store holders though are are putting this together. And so there's an account that I, that I found, Century Egg Credit, something like that. Tried and true SATS investor. SATS is the ticker for EchoStar. And, you know, unlike ASTS, which we used to live in fear of going concern language, EchoStar now has going concern language. They have language about the FCC taking their spectrum. They are running out of cash. They have You know, potential loss of their spectrum. Their businesses are declining. Pay TV subs are down 12%. The Hughes subs are down 14%. Looks like the wireless subs were okay, but the EBITDA was half a billion dollars of losses. Just a train wreck at EchoStar. And yet they think they're gonna just casually go recreate AST SpaceMobile with their no cash. with their no customers, with their no team, with their prime contractor doing it for them. Woo. There really is something about doing it yourself. If you rely on the kindness of strangers, they're going to do what's good for them, which is to bleed you out and murder you. And that's what's likely to happen through change orders and things like that. The history of satellites, which I've studied, deeply is one of people who had a good idea on paper, but failed in the execution. So let's do a quick trip down memory lane so people can share in this experience that I've written about previously in my DD doc, but I fully appreciate not very many people have read that DD doc. So the granddaddy of them all is Teledesic. This is the one founded by Craig McCaw and Bill Gates. Bill Gates is someone probably people have heard of, probably thought, oh, this is going to be successful if Bill Gates is there. They had an audacious plan, going to solve all the world's problems, got FCC approval, had 500 megahertz of spectrum, raised a bunch of money, all this type of stuff. But then it could never get off the ground. The business model fell apart for other reasons because it required these crazy handsets and things like that. But also it was just too complex. And then They had to use Boeing and Motorola. And so they had to use the primes. They were not going to build and design this themselves. And so guess what happens when you go to Boeing with a complex project? The costs go crazy. And then those guys want to reuse their technology and make it work for you. Well, guess what doesn't work for you? Other people's stuff. And that's the fundamental problem when you use a prime contractor is they are not your friend. They want to amortize their own cost base and they want to strip you of your money for their own profit. Fundamental misalignment. And so the delays are crazy, the costs are crazy. It ends in death. Teledesic, dead. Next we had ICL. This really should have just been a crypto company if they were smart, but it wasn't. Boeing again nuked these guys. This was a spinoff from Inmarsat. It was the same type of vision as Teledesic. They were going to create a global communication network. It was backed by Hughes, NEC, Ericsson. So, you know, all the big guys are there. Their first spacecraft blew up in 2000, and then they were able to launch a second one, but they literally never used it for 10 years. They had contracted with Boeing, at the time it was Hughes, To build the satellites. And then predictably, it went out of control. Boeing ultimately stopped construction of the constellation because they got in a fight over the contract. Boeing repriced the construction contract that was revised a couple of times. And so this is the fundamental problem. Do you know how many times ASTS has probably changed their design? I mean, God help us. I hope we never know because we would probably crap our pants. And so that's what happens when you're designing your own stuff on the factory floor. Isabelle and his team, these very talented people, will see a better way to do it as they are getting the learnings, as they are getting the data, as they are physically building stuff and figuring out the right way to do it. They can change in a heartbeat. They don't have to then go to a prime contractor, renegotiate a contract, do all the delays and things like that. When you're iterating, when you're trying to change the world, you don't outsource it. It's really as simple as that. All of the early constellations fell victim to this. Then we had SkyBridge, which was a bridge to nowhere, very similar to Teledesic. They went bankrupt. What did they do? Outsourced it. Same game. Same game. Iridium, same game. They had a business model flaw, but they outsourced it. To Motorola, I believe, was bought out. Motorola had a different set of incentives, you know, bad business plan. Globalstar, same thing. It's over and over and over again. And so Charlie Ergen is falling right into this trap. What I didn't see him disclose is exactly what his contract terms are. And so they talk about an initial order for satellites of like $1 billion and then a full cost of $5 billion. But what you really don't know, and what I kind of felt like I heard from the call, is that the initial stuff was really around test satellites and experimentation. I suspect that he structured this so he could walk away pretty fast, because what he's really just trying to do is get leverage against the FCC, presumably, and potentially some leverage on potential buyers of his spectrum. To say, oh no, no, I have a BATNA, I have a BATNA. We're keeping this out of your hands yet again. But I think the telecom industry is basically, and this is the Ant-Man's view, that telecom industry is going to stand back and just go, all right, clown, go do what you're going to do. Either the FCC is going to take your spectrum from you or you're going to go bankrupt and we'll buy it there. But you can go be a Looney Tune as you see fit. And Charlie's not dumb. He's not going to go sign a $5 billion Commitment only to then potentially file for bankruptcy and have a really big claim rejection and unsecured claim in that estate, which further subordinates his equity recovery. He's not stupid. And so I would imagine that he has Swiss cheese for contractual outs so that this is really a paper constellation and being used as a ploy against the FCC for an extension or some additional leverage against MNOs to try to sell his spectrum. That's what I believe is happening here. Interesting to see, but I'm mentally kind of moving on. I might make a couple more calls just to check with people that are really involved in this and see if I'm missing anything. But it does just kind of show that this is now what people all view as, you know, if you need to throw a life raft out there to get people's attention and like pretend like you have a big opportunity, pretend you have a D2C satellite constellation. And that's ironic. When people clamor and, you know, for shorting this thing and say, oh, there's no TAM and stuff like that. Well, look at this. Charlie Ergen, perceived, first of all, like crazy guy, but perceived to be one of the smartest guys in telecom, certainly the most wily. He's going to always try to throw the biggest life preserver out as possible to show that he has a big opportunity. He's now throwing out D2C as that opportunity. What was previously thought to be a backwater, not a thing, no market, is now the greatest growth story being thrown around by MNOs and telecom companies. Quite the change. And PS, we have $1.5 billion of cash on our balance sheet. So with that, I will let everyone have a great rest of the evening. Next week I'm traveling, and so it's gonna be a little bit tight for me to be back at the same time just 'cause of my flight, I have a flight getting back in pretty late on Sunday. So I'm gonna try to do the Spaces on Saturday evening, just As a heads up in advance, it might be literally from my mother's basement, which will fit all preconceived notions about people that are on Reddit actually just living in their parents' house in a basement. I swear to God, I don't actually live there, but that might be where I'm doing this. But I will try to make sure that our AA meeting continues. Have a great night, everyone. And hopefully next week we have some great developments for our beloved company.